Just Retirement diversifies after pension reform

Shifting gear: Just Retirement is now offering pensioners advice on the best way forward
Just Retirement yesterday reported a 22 per cent fall in sales over nine months, but said demand for its newer products had protected it from a harsher knock from British pension rule changes.

Pension changes, announced last March, mean people who are retiring no longer need to buy an interest-bearing annuity with their pension savings.

As a result Just Retirement, which listed in 2013 and specialises in pensions for people whose unhealthy lifestyles or poor health mean they have shorter than average life expectancy, faced a sharp reduction in individual annuity sales.

Individual underwritten annuity sales dropped 59 per cent to £380.3m in the nine months to the end of March. But at the same time the firm’s sales of bulk annuities, which take on the risk of company defined benefit pension schemes, rose more than tenfold to £448m.

In a bid to diversify, it has also launched “guaranteed income for life” products, a new flexible pension plan on a “drawdown” basis and a regulated advice service.

Chief executive Rodney Cook described the results as a “creditable performance”, given market changes.

He said: “The period before the introduction of the new pension freedoms was always likely to be tough for our industry, and so it has proved.

“In Q3 our DB (defined benefits) team delivered its second-highest quarterly sales volume so far, and the pipeline remains strong.”

He added that it is “too early to say how the Budget reforms introduced last month will affect demand for Guaranteed Income for Life products.”

Though shares fell slightly yesterday, analyst Barrie Cornes at Panmure Gordon rated the stock a “buy”.

He said the outlook for individual annuities is “brighter than many predict” while “bulk annuities provide a rich source of new business.”

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